SMM Weekly Update of China Aluminium Ingot and Billet Social Inventories (Mar 23, 2023)

SHANGHAI, Mar 23 (SMM) – Aluminium ingot: The aluminium ingot social inventories across China’s eight major markets stood at 1.13 million mt as of March 23, down 85,000 mt from a week ago and 47,000 mt from Monday March 20. The figure, albeit up 85,000 mt from the same period last year, has fallen 143,000 mt from the peak recorded in early March. Stocks across three major markets dropped sharply, led by south China, where fewer cargoes arrived following output cuts by smelters earlier while demand recovered. East China saw smooth cargo outflows from warehouses, while trades in Gongyi, Henan province were driven by downstream rigid demand. The destocking was primarily driven by limited arrivals, even though shipments from warehouses picked up. The pace of destocking deserves close attention.
Aluminium billet: After two weeks of accumulation, the domestic aluminium billet social inventory dipped 1,500 mt from a week ago to 167,900 mt as of March 23. Stable aluminium billet production ensured smooth arrivals. More billets flowed to Foshan instead of Wuxi due to widening price difference between the two regions. As a result, stocks in Foshan kept growing while those in Wuxi declined rapidly. Considering stable billet production and continued rise in downstream operating rates in March-April, aluminium billet stocks are on track to drop further, albeit at a slow pace.